12.09.11
Posted in Seychelles government, Seychelles legislation at 4:31 pm by Robert Klien
President James Michel has announced that a council which will have the function of advising government on the best economic policy for sustainable national growth and development has been established. The new body is called the National Economic Council. It will hold regularly meetings to discuss matters raised by its members, President James Michel or referred to it by the government of Seychelles.
The new council may commission and analyze data and information that may be required to advise government on suitable economic strategies and to detect whether existing national programmes meet strategic economic objectives.
When announcing the creation of the new body, the President noted that the world economy is becoming increasingly fragile, and therefore it is important to ensure that Seychelles’ national development strategy was founded on a thorough understanding of the economic environment and the dynamics of the emerging forces shaping the future of the global economy. He said: “Continued economic success depends on the cooperation of all stakeholders. Working for the benefit of Seychelles is paramount in every decision-making process. The National Economic Council will serve as a hub for information, debate and advice, in the process of developing sound national economic policy”.
The National Economic Council will be chaired by the President. The Vice-President and Minister responsible for Finance, Danny Faure, will be its vice-chair. The other members of the council will be Minister for Home Affairs, Environment, Transport and Energy, Joel Morgan; Governor of the Central Bank of Seychelles, Pierre Laporte; CEO of the Seychelles International Business Authority, Steve Fanny; CEO of the Seychelles Savings Bank, Michael Benstrong; CEO of the Seychelles Tourism Board, Alain St Ange; principal statistician, National Bureau of Statistics, Michel Mellie; and others.
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11.22.11
Posted in Double Taxation Agreements, International relations, Seychelles government, Seychelles legislation at 2:21 pm by Robert Klien
An agreement aimed at avoiding double taxation and preventing fiscal evasion with respect to taxes on income has been signed between Seychelles and Sri Lanka.
The double tax treaty was signed in Colombo by the commissioner general of Sri Lanka, K.M.S. Kandegedara and Jennifer Morel from the Seychelles Revenue Commission.
It should be reminded that communications on double tax avoidance were initiated in May 2008 by Seychelles authorities and acknowledged in July 2008 by Sri Lanka. The two countries agreed to have the 1st round of negotiation in Seychelles on December 15-19, 2008 whereby agreement was reached on all articles. So, the document was initialed on December 19, 2008.
When ratified by both parties, the signing of this DTA brings Seychelles’ double taxation agreement number to a total of 17.
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08.19.11
Posted in Business and Economy, Seychelles legislation at 1:37 pm by Robert Klien
It has been discussed recently that Seychelles’ tax reforms will end with the Value Added Tax (VAT) due to come into effect on July 1, 2012. So, on July 1, 2012, the VAT will replace the GST (Goods and Services Tax).
GST was implemented in Seychelles in 2003 and is levied on the importation of all goods, unless exempted under the GST Regulations 2003. GST is also levied on the sales turnover of specified manufacturers of goods produced in Seychelles and on specified service providers. Initially, this tax was imposed at the point of entry and at the point of sale for professional service providers. As the years went by, only holders of the Tourism Incentive Act (TIA) certificate benefited from a GST concession on imported goods. Then, in 2010, the concession was extended to other businesses. As a fact, GST works as a turnover tax without deduction of the input tax.
VAT is a broad-based tax, levied on all imported goods at the point of entry by Customs and on domestic supplies of goods and services made by Vat registered businesses, with a few exemptions specifically designated in the Value Added Tax Act 2010.
There are certain similarities of VAT and GST. First of all, both VAT and GST are indirect taxes levied on sales, and the final consumers bear the ultimate burden of the tax. However, VAT will correct some undesirable effects of the GST, such as the cascading and distorting ones. So, VAT is to significantly improve the tax system.
When a VAT-registered taxpayers purchases goods or incurs expenses for the purpose of their businesses, they are allowed to offset the tax paid on these inputs (input tax) against the tax collected from their customers (output tax). If the difference occurs, it is remitted to the Seychelles Revenue Commission. If input tax exceeds output tax, there is a VAT credit that can be either carried forward or refunded. So, these typical VAT mechanisms prevent double taxation and cascading effects allowed by GST.
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01.14.11
Posted in International Organisations, Seychelles government, Seychelles legislation at 3:58 pm by Robert Klien
As a result of a substantial fiscal over-performance by the Seychelles in 2010 after 2 years of its stabilization programme, as well as taking into consideration a rapidly recovering economy on the tourist sector, has the International Monetary Fund (IMF) has issued a report with its recommendations to the jurisdiction. In its report, the IMF staff recommended completion of the Seychelles’ 3-year funding facility.
According to the International Monetary Fund, the strong and continued fiscal adjustment has restored the prospect of sustained medium-term growth and debt sustainability for the jurisdiction. The government revenues have created fiscal space for extra discretionary spending, and debt reduction accelerated. It is expected now that revenues exceed original budget projections by more than 4% of GDP in 2010, which would reflect mainly tax collections on turnover and imports that are stronger than predicted.
In the IMF’s view, tax reforms and improvements in revenue administration and expenditure management have helped Seychelles to sustain its credibility of the fiscal adjustment. The reform of the tax system that was launched at the beginning of 2010 has been continued, and its base has been broadened.
It was pointed out by the International Monetary Fund that the government of Seychelles is implementing comprehensive tax reforms with a view to further rationalize the tax system as well as to harmonize rates across sectors. The personal income tax rate was reduced from 18.75% to 15%, effective October 1, which is 3 months ahead of schedule. From January 1, 2011, there is one harmonized rate of personal income tax for all employees in all sectors, with the increase from 10% in the personal income tax rate paid by expatriates.
Preparatory work is underway for replacing goods and services tax (GST) with a value-added tax (VAT) in 2012. In accordance with the government of Seychelles, introducing the VAT is aimed to improve integration in the economy, broaden the base, eliminate cascading, as well as increase efficiency and fairness.
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01.02.11
Posted in Seychelles government, Seychelles legislation at 4:30 pm by Robert Klien
On July 1, 2010, the Income and Non-Monetary Benefits Tax Act 2010 became effective. It introduced a tax levied on both employees and employers.
For the period July 1 to September 30, 2010, all Seychellois employees were liable to an income tax rate of 18.75% on their gross pay. From October 1, the rate of income tax applicable on the total earnings of Seychellois employees was reduced from 18.75% to 15%. So, all Seychellois employees saw an increase of 3.75% in their salary from October onwards.
It should be noted that all the other applicable rates under the Act remain as follows:
- income tax for non-Seychellois employees – 10%;
- non-monetary benefits tax payable by an employer – 20%;
- domestic worker – R50;
- daycare worker – either R100 or 10% of total emolument, whichever is lower;
- an person employed by a farming company or a boat owner (as defined under the Agriculture and Fisheries Incentives Act 2005) – R100.
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09.11.10
Posted in International relations, Seychelles government, Seychelles legislation at 2:25 pm by Robert Klien
On Monday, September 6, 2010, the President of Seychelles James Michel met with Chen Zhili, vice chairwoman of the Standing Committee of National People’s Congress (NPC), the top legislative body of China. During the meeting, both parties pledged to enhance bilateral ties between the Cayman Islands and China.
By words of Seychelles president, the successful visit by Chinese President Hu Jintao to Seychelles in 2007 has pushed the bilateral ties between the two countries to a new high. Also, in his speech President thanked China for its support in the socioeconomic development of Seychelles, and said that Seychelles are ready to strengthen cooperation with China both in the international and regional affairs, as well as to support the one-China policy.
The same day, the Chinese official met with Speaker of Seychelles’ National Assembly Patrick Herminie. Chen Zhili said that China’s NPC attaches great importance in developing friendly ties with Seychelles’ National Assembly, and is willing to strengthen the exchange and coordination between the legislation systems of the two countries.
In the year 2011, there will be the 35th anniversary of the diplomatic ties between Seychelles and China. The countries are enjoying close cooperation in the international and regional affairs.
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08.05.10
Posted in International Organisations, Seychelles government, Seychelles legislation at 11:55 am by Robert Klien
According to the International Monetary Fund (IMF), Seychelles is meeting the performance criteria under its Extended Funds Facility, namely in the launch of tax reforms.
A comprehensive tax reform was launched by the Seychelles government with the budget 2010. The first stage of it was the introduction of a revised Business Tax Act from January 1, 2010. Business tax reform widened the tax base and provided for gradual reduction in tax rates.
The second stage has been the introduction of a withholding-based personal income tax on wages from July 1, 2010. Seychelles government is planning to broaden the application of personal income tax to other sources of domestic-sourced income, as the new system becomes established. From January 1, 2011, Personal Income Tax rates will be set at 15% for all categories of workers.
The last stage will be the introduction of a value-added tax (VAT) from January 1, 2012, which will take the place of multiple-rate goods and services tax (GST).
Along with these reforms, revenue administration will be also modernized. By the time of the tax reform, the Seychelles government’s policy will not provide new tax incentives and exemptions.
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04.17.10
Posted in International relations, Seychelles government, Seychelles legislation at 10:44 am by Robert Klien
On April 16, a high-level meeting on piracy was held in Seychelles. Among the issues discussed at the event was the necessity of stronger support for the country in the international fight against piracy.
At the event, the chairman of the high-level committee on piracy, Joël Morgan, met with the chairman of the working group II of contact group on piracy off the coast of Somalia, ambassador Thomas Winkler, and representative of the UNODC. Also, the meeting was attended by British high commissioner Mathew Forbes and French ambassador Philippe Delacroix.
Much attention was paid to discussing the positioning in the jurisdiction of people to support the criminal justice system in order to coordinate the material, human resources and financial support mechanisms that the country is to benefit from within the context of its anti-piracy activities. Also, the minister was talking about the upcoming working group II meeting in Copenhagen (Denmark) where legal issues of transfer arrangements of convicted pirates back to Somalia will be discussed. He said that there is an urgent need for the prisons in Somalia to hold convicted pirates. Also, according to the policy of government, the Somali authorities must take responsibility for the actions of their citizens convicted of piracy.
Ambassador welcomed Seychelles’ new anti-piracy legislation. Also, he expressed the appreciation of the active role the jurisdiction has taken to counter piracy and to bring pirates to justice. Winkler also expressed his support for the Seychelles’ position against piracy internationally.
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03.30.10
Posted in Seychelles government, Seychelles legislation at 5:07 pm by Robert Klien
As from January 1, 2010, the Seychelles Revenue Commission introduced a Seychelles Business Number (SBN) and a Taxpayer Identification Number (TIN).
According to the Commission, SBN and the new GST system will be introduced by the government of Seychelles in 2012. A new goods and services tax (GST) system will be introduced on January 1, 2012 and will be akin to the value-added tax (VAT) in countries such as the United Kingdom. The SBN will be an important part of this new tax system that will give taxpayers the opportunity and the time to familiarize themselves with the SBN as well as to register their business in preparation.
It should be noted that, as regards the registration to obtain an SBN, nothing has changed. However, in the state-of-the-nation address on February 26, 2010, President James Michel said anounced a phasing-in of the SBN.
From January 1, 2010, there was a withholding obligation where a business sold goods or services without quoting their SBN on invoices over R5,000. However, this is no longer in place. This change is effective from January 1, 2010.
In addition to the SBN, the Seychelles Revenue Commission has introduced a Tax Identification Number (TIN) as part of the tax reform programme. The TIN will replace the old Business Tax ID and Social Security number.
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03.18.10
Posted in Seychelles legislation at 11:57 am by Robert Klien
Minister Joel Morgan said that moves to amend the Penal Code prove the government’s commitment to countering piracy. On March 16, Morgan was speaking in the National Assembly to present the Penal Code (Amendment) Bill that will define the action of piracy and empower the attorney-general to prosecute offences regardless of whether they are committed in or outside the jurisdiction.
The Minister for Environment, Natural Resources and Transport, as well as the head of the High-Level Committee on Piracy said that the amendments update an English law of 1843.
Morgan explained that there is a need to take measures to counter piracy as the situation is getting worse that is revealed by up to 10 attacks by suspected pirates around Seychelles’ exclusive economic zone in the last 10-12 days. The existing laws were not well-suited to the situation like this, while the amended law includes a number of provisions of the UN Convention on the Law of the Sea. With the changes, courts in Seychelles will be given the power to impose a punishment of 30 years in prison and a fine of R1 million on a person committing the offence of piracy or attempting or conspiring to commit piracy.
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